Nasty Checks Into The Chelsea Hotel

This past Friday, an NYPD bomb squad was reportedly called to the hotel on a report of a suspicious package addressed to Mr. Elder. The box, it turned out, contained a fish head, reminiscent of a scene from The Godfather.

Mr. Elder did not respond to messages left at the hotel, but a source close to him confirmed the scaly details: “Yes, they delivered a fish head—they also left excrement outside David’s door.”

MR. BARD AND MR. ELDER have a long history. Mr. Bard’s father and Mr. Elder’s grandfather were business partners: David Bard and Joseph Gross, who, alongside another partner, Julius Krauss, purchased the hotel back in 1945. Six decades later, the heirs are now fighting over the Chelsea’s future.

“David is there to watch that things are being done properly,” said the late Julius Krauss’s daughter, Marlene Krauss, a medical doctor and chief executive of KBL Healthcare Ventures. “Frankly, it’s time that somebody watched what Stanley is doing.”

The shake-up at the Chelsea Hotel came after a corporate arbitration three years ago, initiated by Mr. Elder, which ultimately resulted in transferring managerial control from the majority shareholder, Mr. Bard, to minority shareholders Dr. Krauss and Mr. Elder—albeit only for a finite amount of time.

According to Dr. Krauss, the dispute involved Mr. Bard’s “exorbitant” salary, as well as questionable sales of stock in the company and ownership of the hotel’s vast art collection. In the end, an arbiter ruled that the art belongs to the hotel itself—not to Mr. Bard—and further ordered the Bard family to reimburse the hotel’s coffers to the tune of more than $900,000. The ruling further shifted oversight of the hotel’s operations to Mr. Elder and Dr. Krauss for a period of 10 years, after which the Bard family regains its majority rule.

To hear Dr. Krauss tell it, the entire hotel operation under Mr. Bard has served as an excellent example of how not to run a conventional business.

“The company is so badly mismanaged,” said Dr. Krauss, who pointed out that she once attended Harvard Business School. “If you were gonna do a Harvard Business School case on mismanagement, this would be the case. There are no financial controls. There’s no business strategy—just total mismanagement.”

She pointed to the hotel’s longstanding restaurant tenant, El Quijote: “They have a 40-year lease. Nobody has a 40-year lease!”

She pointed to errant bookkeeping: “It took us over a year to get the rent histories.

“He doesn’t have the ability or desire to run this like a normal business,” she said of Mr. Bard.

Yet, given his charisma and his reputation in the artistic community, new management offered to pay Mr. Bard a full salary to stay on as a sort of consultant, while writing his memoirs—just so long as he stayed out of operational matters, Dr. Krauss said. Four weeks after drawing up the papers for the consultancy, Mr. Bard has yet to respond. Instead, he’s been altering reservations and interfering in recent rate changes.